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Estimating a poverty line: An application to free basic municipal services in South Africa

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  • Haroon Bhorat
  • Morne Oosthuizen
  • Carlene Van Der Westhuizen

    ()
    (Development Policy Research Unit
    Director and Professor)

Abstract

One of the key interventions aimed at improving the welfare of South African households has been local government’s provision of a package of free basic services (FBS) to poor households. It is, however, not completely clear how different municipalities identify households which are eligible for FBS. Evidence suggests that many municipalities currently provide services to all households with a monthly income of less than R1500 per month. This “FBS poverty line” is, however, low in comparison with a number of unofficial poverty lines utilised by policymakers and researchers in South Africa. This paper considers the impact of increasing the value of the FBS line, both in terms of the additional share and number of households eligible for support as well as the additional financial cost. We find that urban municipalities will face the steepest increases in their FBS budgets with any potential increase in the FBS poverty line.

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File URL: http://www.dpru.uct.ac.za/sites/default/files/image_tool/images/36/DPRU%20WP11-142_0.pdf
File Function: First version, 2011
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Bibliographic Info

Paper provided by University of Cape Town, Development Policy Research Unit in its series Working Papers with number 11142.

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Length: 17 pages
Date of creation: Oct 2011
Date of revision:
Publication status: Published in Working Paper Series by the Development Policy Research Unit, October 2011, pages 1-17
Handle: RePEc:ctw:wpaper:11142

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Keywords: free basic services; poverty line; municipal services; South Africa;

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